Merck KGaA says it has kicked off the year with a solid first quarter, posting a near 16% rise in group net sales to 3 billion euros ($3.4 billion), and a 2.5% increase in earnings before interest and tax to 480 million euros.
Organically, sales grew by 1.3%, as the reported figure was lifted by nearly 9 percentage points on positive currency effects and also because of the integration of AZ Electronic Materials, which accounted for 5.5%. On the downside, group net income fell 13.4% to 282 million euros, largely because of financing costs incurred in advance of the planned acquisition of Sigma-Aldrich.
First-quarter sales from Merck’s healthcare division were up 7.4% to 1.7 billion euros, though this masked positive foreign exchange effects of 7.1%.
Still, the unit managed to post organic sales growth of 0.3%, as strong performances by the firm’s Glucophage (metformin) and Concor (bisoprolol) products helped offset a 16% drop in sales of its top-seller, multiple sclerosis drug Rebif (interferon beta-1a), to $430 million, hit by “strong competition from oral formulations”. Turnover of cancer drug Erbitux (cetuximab) fell organically by 5.9% to 205 million euros.
These decreases, coupled with a higher send on research and development and the absence of certain royalty and license income dragged on the division’s earnings, so that EBITDA pre-exceptionals fell 3.8% to 461 million euros.
Nevertheless, Merck said that, overall is pleased with the group’s performance in a “challenging environment," and continues to expect “slight organic sales growth” for the full year to between 12.3 billion euros and 12.5 billion euros.
The firm also highlighted plans to “invest heavily in immuno-oncology” and, together with Pfizer, “build a strong position in this emerging research area”. Also on the research front, chief executive Karl-Ludwig Kley noted that the firm has recently kicked off a Phase III clinical trial of avelumab in non-small-cell lung cancer, and that up to five further trials “that could be pivotal for product registrations” are due to start this year.